Amid record deficit, San Jose moves to outsource janitor jobs

Gilberto Robles, 42, left, and Jose Mendoza, 59, hold signs outside the new Terminal B. Both have at least 12 years on the job here and will be laid off July 31. Janitors who clean San Jose-owned or operated office space are facing being laid off and replaced by non-union janitors so the city can pare down its budget deficit. Today, AFSCME Local 101- represented janitors picketed out front of the city's new Terminal B at the airport, where the mayor and other city officials arrived for the air gala celebration on Thursday, June 24, 2010.

After he was laid off from United Technologies 13 years ago, Lucio Torres welcomed the stability of a city janitorial job cleaning San Jose's airport.

But that job now has fallen victim to what has long been a familiar tale of woe outside government. Facing a record deficit, city officials decided in their latest budget to outsource custodial jobs to private contractors.

The move marks the first major outsourcing of city work in more than a decade. Politically influential employee unions have vigorously fought efforts to outsource, arguing taxpayer money shouldn't go to companies paying poverty wages.

"This place seemed like a secure job, more than a factory job," Torres, 59, lamented last week as he joined other city custodians protesting outside the airport. Inside, the private contractors replacing them at about half the cost cleaned windows and floors.

But San Jose isn't the only local government agency feeling financial pressure to outsource. Officials at the Housing Authority of the County of Santa Clara on Tuesday will discuss outsourcing property management services. That would cost 120 employees their jobs but cut costs in half, saving millions of dollars.

And even in a union-friendly town, San Jose officials facing a ninth straight year of shortfalls driven largely by employee costs say outsourcing now is a necessary evil.

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City leaders in 1997 adopted a "public-private competition policy" critics said was so labyrinthine that it effectively shut the door on outsourcing. A decade later, councilman Pierluigi Oliverio proposed a one-year pilot program to outsource maintenance at Rose Garden Municipal Park. But union leaders said it required negotiation, and the council buried the idea.

Last year, with rising employee costs increasing calls for outsourcing, labor leaders urged the council to toughen the competition policy, arguing it needed more safeguards to ensure taxpayers were getting quality work. Business leaders countered it should be loosened to help the city control costs. The council approved a modest revision over objections from Mayor Chuck Reed, Oliverio and councilmen Pete Constant and Sam Liccardo.

With the custodians, however, the cost difference was so substantial that city officials said it was pointless to invoke the competition policy's evaluation process. City custodians earn up to $23.07 an hour, plus benefits more generous than those found at private companies: a pension and a health plan with 10 percent premium costs and $10 co-payments for employees.

The contract custodians, represented by a different union than their city counterparts, can be paid $12.83 an hour, with benefits, under San Jose's "living wage" policy. The bottom line, officials say, is that the city custodians cost an average $40.41 an hour, about double the $19.18 for the contract janitors.

"We don't believe it's because the outsource companies don't pay well," said city Employee Relations Director Alex Gurza. "But when you compare the two side by side, it is just a huge difference."

Outsourcing will cost about 70 city janitors their jobs and save about $4 million a year, including $3.3 million at the airport, where city leaders say savings are particularly needed. Even as the airport, run independently from other city operations, celebrates a $1.3 billion makeover, it's struggling to keep airline business amid an industry slump. Competing airports in San Diego and Phoenix outsource their janitorial work, city officials say.

And contractors already do some work at San Jose's airport, City Hall and other municipal buildings at night or when the city janitorial staff is short-handed.

Oliverio said the high cost of city janitors is hard to explain to residents angry that San Jose is reducing library hours and laying off police officers and firefighters to balance the books.

Still, the human cost for the janitors is heartbreaking.

"I just can't sleep at night wondering what I'm going to do," said custodian Gilberto Robles, 42, as he protested the job cuts outside the airport. Robles took the job 13 years ago after working as a shipping clerk to "make a better life for my kids." Now, he must find a way to support those four children and pay a $2,200 monthly mortgage.

As dignitaries gathered for wine and cheese at Thursday's celebration of the airport's makeover, Robles and other custodians outside seethed at the city's insistence that it cannot afford them, noting among other things a $1.1 million mural on the new parking garage. San Jose officials say the airport project was paid with funds that can't be spent on staff or other operating costs.

City leaders this year asked all employees to take 10 percent compensation cuts to save jobs. Seven of the city's 11 unions have agreed but not the American Federation of State, County and Municipal Employees, which represents the janitors.

The union did offer a 20 percent pay cut for the custodians to save jobs, along with giving up a 2 percent raise promised in next year's contract for all of its 2,200 San Jose workers. But union leaders would not waive the city competition policy.

City officials, for their part, offered to delay outsourcing some janitorial jobs for a year in exchange for the full pay cut.

Robles was unhappy with both sides' proposals and wondered why custodians, among the city's lowest-paid workers, should take twice the cut of other employees.

"It should be equal for everybody," Robles said. "We all work hard here."

Mercury News Staff Writer Karen de Sá contributed to this report. Contact John Woolfolk at 408-975-9346.